Yeah, Intel has been targeting graphics for years and years now. They do fine with low end graphics for servers that only need to be able to show a GUI (if that) and users that don't need any 3d capability. But they have never had any success with even a mid-range offering.
Nevertheless, because they are Intel, every year the so-called-experts predict the end of ATI and Nvidia because "Intel will take over graphics", (which I think they do only to get all the gamers in an uproar by the way) and every year it doesn't happen. Every time Intel tries to make even a mid-range video card, its terrible and they usually don't even bother to release it.
It does keep ATI and Nvidia pushing forwards though. ATI sold itself to AMD partly as a hedge against this very thing.
